SM Entertainment currently has about one month to pay the government over 20.2 billion won, which is 3.19% of the company's net worth.
SM Entertainment has been asked to pay a fee of 20 billion won or around Rp.249.8 billion after an investigation into tax evasion. On February 5, a report revealed that SM Entertainment was ordered to pay the government to the Seoul National Tax Service Regional Office.
Still according to reports cited from Allkpop, SM is currently undergoing a special investigation for alleged tax evasion involving chairman Lee Soo Man. SM Entertainment itself stated that the label had undergone a tax audit compliant, but the authorities have stated there was unusual activity in certain transactions and documents. Reports alleged there was a leak of company funds between former CEO Lee Soo Man and the agency, and financial information was left behind during transactions to other companies.
SM currently has about a month to pay the government more than 20.2 billion won, which is 3.19% of the company's net worth. The agency of EXO et al has further stated that they will pay the fee by the March 31 deadline, but they will also follow up with an appeal process.
Apart from the investigation of tax evasion, SM Entertainment incurred a net loss of 15.6 billion won between July and September 2020. The National Tax Service Investigation Bureau also investigated the shares of Lee Soo Man, who is the largest shareholder with 18.73% in the company, and his nephew. Lee Sung Soo, who is the co-CEO of the label at this time.
Meanwhile, this is not the first time SM Entertainment has undergone an investigation regarding tax evasion. In 2014, Lee Soo Man was ordered to pay 10 billion won to set up a company in Hong Kong to hide overseas profits. He was also sentenced to 2 years in prison with 3 years of probation for embezzling company funds in 2002./wk
